I did not mean to imply that ColorDMD is only good for video modes. I meant that a player can usually stare at the DMD during video modes without fear of draining ; and that's when having a colored DMD really shines for the player. Since ColorDMD does this the best that's what really puts them over the top.
Now for the half height games, the DMD animations themselves are pretty basic. I'm basing this on seeing the stock frames of TMNT, hook, and checkpoint.
Its half the resolution of "regular dmd" games and from what Ive seen there is zero shading. Either a pixel is lit or its off.
I think a visual representation is best. And yes, a ColorDMD is more than capable of doing all of these things:
original-logo.PNG16x128 black and white original title screen
color-logo.PNG16x128 basic coloring (using masks) 4 color limit
fancy-color-logo.PNG16x128 a little fancier with replacement colors , 16 color limit
fancy32x-logo.PNG32x128 complete redraw to fit the canvas, 16 color limit
So yes, they totally can color the half height games; but short of some big redraws it wont have the visual awesomeness of things like the Hurricane colorization linked up there.
And yes, I'd totally be up for coloring these games for ColorDMD